Enterprises would have to buy insurance for their construction activity if a draft decree guiding the implementation of the Construction Law 2014 is approved.
Enterprises would have to buy insurance for their construction activity if a draft decree guiding the implementation of the Construction Law 2014 is approved.
The law regulates that insurance for construction activity is compulsory. The Ministry of Finance put the draft decree on the table for comment at a meeting with insurance companies in Hanoi on Monday.
The draft clarifies insurance premiums for construction projects will not be lower than the total cost written in construction contracts of the structures.
Insurance for workers at construction projects varies depending on the severity of injuries. The amount will be VND100 million (US$4,453) for a dead case.
The draft decree says insurance premiums for construction projects should be enough for the investor to cover compensation and management costs.
Before the law took effect, insurance firms benefited much from the premiums paid voluntarily by construction companies for their projects. Figures showed insurers had to spend only one-third of the premiums they had collected on compensation for accidents and damage at construction sites a year.
In the 1994-2014 period, construction insurance premiums grew 12% annually and reached VND2.3 trillion (US$102.46 million) last year. On average, insurance companies spend a total of VND700 billion each year on compensation for project investors and contractors to partly cover damage at their projects.
(Source: SGT)
